Friday, February 24, 2006

Smart charity...

A Texas oil billionaire, Boone Pickens, gave $165 million to charity - a program to benefit the golf programme at Ohio State university ! He also got a sizeable tax break as a result...

Why is this interesting ? Billionaire "philanthropists" give away large sums of money from time to time...some have even been larger gifts. This particular "gift" is interesting, because the omney spent less than an hour in the university account. It was transferred immediately to a hedge fund controlled by Mr. Pickens ! So, he basically gave a gift to himself and got a tax break as a result !

Here is an interesting excerpt from the NY Times article...
To some, the question is whether a wealthy person should get a tax break now for money that has essentially not yet been put to charitable use. By giving the money before 2005 expired, Mr. Pickens was able to take advantage of a provision in Hurricane Katrina relief legislation that allowed him a deduction for a charitable gift equal to 100 percent of his adjusted gross income, double the normal limit of 50 percent. If he does not have that much income in 2005, he can carry the deduction into future years.

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